I was able to setup a user proximity search for D7 with the following combo of geo modules on drupal.org.
The last one is on github ...(The existing module on drupal.org does not cover users yet).
Using that combo and views make it relatively easy to set up a user proximity search.
To get it to work you will have to add an address field and a geofield to the user profile. Set the geofield to "Geocode from another field" and it will automatically store the correct geo location info from the address field. Then in a user view you can use the Proximity filters supplied by the github module for filtering proximity on address,zip-codes etc etc. Within a certain distance.
There is also a features module that has great views example for a regular node proximity search. This module uses the same module recipe from above except for the proximity module but the github code will work as well because it forked from the original and just adds entity support for user locations.